Many people view home ownership as a sign of success, stability, and security. But owning a home has its own set of financial consequences and is a significant financial commitment that might put a burden on your budget as this includes the charges from Packers and movers in secunderabad as well. The Indian government provides financial relief in the form of tax incentives on home loans to make things easy for property owners. The Income Tax Act of 1961 has provisions tucked away in some sections that allow deductions for home loan principal and interest payments. Your taxable income may be significantly decreased by these tax advantages.
Different Tax Benefits on Home Loans
If you choose a home loan, you will have to pay back principal as well as interest. Since you have to pay the whole amount as well the charges for domestic shifting services, the total becomes huge and it is advisable to claim tax benefits if you are eligible.
- Section 80C
Up to Rs. 1.5 lakhs per year, the principal portion of the Equated Monthly Instalment (EMI) is deducted under this provision from your total taxable income. The one-time registration and stamp duty costs are included in this reduction. You have five years from the date of possession to sell the property, according to the requirement.
- Section 24
Under this clause, tax reduction is provided on the interest component of the EMI. The type of property determines the maximum deduction. The maximum annual deduction for interest paid on self-occupied property is Rs. 2 lakhs. There is no cap on the amount of interest you can deduct from your total income when it comes to a let-out property.
- Section 80EE
In addition to the benefits granted by section 24, this provision offers further relief on the interest part. Section 80EE allows for a maximum deduction of Rs. 50,000. You must be a first-time homeowner, have a home loan that does not exceed Rs. 35 lakhs, and have a property valued at no more than Rs. 50 lakhs in order to qualify. This relieves you and you can pay charges to packers and movers in Hyderabad as well.
- Section 80EEA
Up to Rs. 1.5 lakhs in additional relief on the interest component is also provided by this provision. This is in addition to the section 24 deduction. You may deduct the interest portion of your home loan EMIs up to Rs. 3.5 lakhs when combined with section 24 and section 80EEA. In order to qualify for this benefit, you must be a first-time homeowner, have a home loan from a bank or housing finance company, have a property with a stamp duty value of no more than Rs. 45 lakhs, and have not previously claimed benefits under section 80EE.
Joint Home Loan Tax Benefits
In essence, a combined house loan is a mortgage taken out by two or more people jointly. This type of agreement is frequently used by couples, parents and kids, or even siblings, and is usually chosen when a large loan amount is needed and it would be difficult for one person to repay the debt. Different tax benefits are for co-borrowers are:
- Each co-borrower is eligible for a deduction under Section 80C for the repayment of the house loan’s principal, up to a maximum of Rs 1.5 lakh.
- Under Section 80C, co-borrowers may also deduct taxes on stamp duty and registration fees up to a total of ₹1.5 lakh.
- In their income tax return, each co-borrower may deduct up to Rs 2 lakh for the interest paid on their home loan (under Section 24).
